9 MyPath Home Content O Managerial Accounting, Fifteenth x My Questions | bartleby х O File | C:/Users/pse/Documents/managerial-accounting-15th-edition.pdf Managerial Accounting, Fifteenth Edition 96/ 795 2,000 2,100 2,200 Fixed cost Variable cost Total cost .. Average cost per cup of coffee served ..... 2. Does the average cost per cup of coffee served increase, decrease, or remain the same as the number of cups of coffee served in a week increases? Explain. EXERCISE 2-5 High-Low Method [LO2-5] The Cheyenne Hotel in Big Sky, Montana, has accumulated records of the total electrical costs of the hotel and the number of occupancy-days over the last year. An occupancy-day represents a room rented out for one day. The hotel's business is highly seasonal, with peaks occurring during the ski season and in the summer. Month Occupancy-Days Electrical Costs January . February $4,127 $4,207 $5,083 $2,857 $1,871 $2,696 $4,670 $5,148 $2,691 $1,588 $2,454 1,736 1,904 March 2,356 April 960 May 360 June 744 July August September 2,108 2,406 840 October 124 November 720 December ...... 1,364 $3,529 Required: 1. Using the high-low method, estimate the fixed cost of electricity per month and the variable cost of electricity per occupancy-day. Round off the fixed cost to the nearest whole dollar and the variable cost to the nearest whole cent. 2. What other factors other than occupancy-days are likely to affect the variation in electrical costs from month to month? EXERCISE 2-6 Traditional and Contribution Format Income Statements [LO2-6] Cherokee Inc. is a merchandiser that provided the following information: 3:21 PM O Type here to search Hi 55 19 3/23/2020
9 MyPath Home Content O Managerial Accounting, Fifteenth x My Questions | bartleby х O File | C:/Users/pse/Documents/managerial-accounting-15th-edition.pdf Managerial Accounting, Fifteenth Edition 96/ 795 2,000 2,100 2,200 Fixed cost Variable cost Total cost .. Average cost per cup of coffee served ..... 2. Does the average cost per cup of coffee served increase, decrease, or remain the same as the number of cups of coffee served in a week increases? Explain. EXERCISE 2-5 High-Low Method [LO2-5] The Cheyenne Hotel in Big Sky, Montana, has accumulated records of the total electrical costs of the hotel and the number of occupancy-days over the last year. An occupancy-day represents a room rented out for one day. The hotel's business is highly seasonal, with peaks occurring during the ski season and in the summer. Month Occupancy-Days Electrical Costs January . February $4,127 $4,207 $5,083 $2,857 $1,871 $2,696 $4,670 $5,148 $2,691 $1,588 $2,454 1,736 1,904 March 2,356 April 960 May 360 June 744 July August September 2,108 2,406 840 October 124 November 720 December ...... 1,364 $3,529 Required: 1. Using the high-low method, estimate the fixed cost of electricity per month and the variable cost of electricity per occupancy-day. Round off the fixed cost to the nearest whole dollar and the variable cost to the nearest whole cent. 2. What other factors other than occupancy-days are likely to affect the variation in electrical costs from month to month? EXERCISE 2-6 Traditional and Contribution Format Income Statements [LO2-6] Cherokee Inc. is a merchandiser that provided the following information: 3:21 PM O Type here to search Hi 55 19 3/23/2020
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![9 MyPath Home
Content
O Managerial Accounting, Fifteenth x
My Questions | bartleby
х
O File | C:/Users/pse/Documents/managerial-accounting-15th-edition.pdf
Managerial Accounting, Fifteenth Edition
96/ 795
2,000
2,100
2,200
Fixed cost
Variable cost
Total cost ..
Average cost per cup of coffee served .....
2. Does the average cost per cup of coffee served increase, decrease, or remain the same as the
number of cups of coffee served in a week increases? Explain.
EXERCISE 2-5 High-Low Method [LO2-5]
The Cheyenne Hotel in Big Sky, Montana, has accumulated records of the total electrical costs
of the hotel and the number of occupancy-days over the last year. An occupancy-day represents a
room rented out for one day. The hotel's business is highly seasonal, with peaks occurring during
the ski season and in the summer.
Month
Occupancy-Days
Electrical Costs
January .
February
$4,127
$4,207
$5,083
$2,857
$1,871
$2,696
$4,670
$5,148
$2,691
$1,588
$2,454
1,736
1,904
March
2,356
April
960
May
360
June
744
July
August
September
2,108
2,406
840
October
124
November
720
December ......
1,364
$3,529
Required:
1. Using the high-low method, estimate the fixed cost of electricity per month and the variable
cost of electricity per occupancy-day. Round off the fixed cost to the nearest whole dollar and
the variable cost to the nearest whole cent.
2.
What other factors other than occupancy-days are likely to affect the variation in electrical
costs from month to month?
EXERCISE 2-6 Traditional and Contribution Format Income Statements [LO2-6]
Cherokee Inc. is a merchandiser that provided the following information:
3:21 PM
O Type here to search
Hi
55
19
3/23/2020](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F702fb32a-4fe0-42fc-bb8d-b441ccd6ae07%2Fdfe002ff-4645-4f7b-91cd-4f8d94c82254%2F7cbzta.png&w=3840&q=75)
Transcribed Image Text:9 MyPath Home
Content
O Managerial Accounting, Fifteenth x
My Questions | bartleby
х
O File | C:/Users/pse/Documents/managerial-accounting-15th-edition.pdf
Managerial Accounting, Fifteenth Edition
96/ 795
2,000
2,100
2,200
Fixed cost
Variable cost
Total cost ..
Average cost per cup of coffee served .....
2. Does the average cost per cup of coffee served increase, decrease, or remain the same as the
number of cups of coffee served in a week increases? Explain.
EXERCISE 2-5 High-Low Method [LO2-5]
The Cheyenne Hotel in Big Sky, Montana, has accumulated records of the total electrical costs
of the hotel and the number of occupancy-days over the last year. An occupancy-day represents a
room rented out for one day. The hotel's business is highly seasonal, with peaks occurring during
the ski season and in the summer.
Month
Occupancy-Days
Electrical Costs
January .
February
$4,127
$4,207
$5,083
$2,857
$1,871
$2,696
$4,670
$5,148
$2,691
$1,588
$2,454
1,736
1,904
March
2,356
April
960
May
360
June
744
July
August
September
2,108
2,406
840
October
124
November
720
December ......
1,364
$3,529
Required:
1. Using the high-low method, estimate the fixed cost of electricity per month and the variable
cost of electricity per occupancy-day. Round off the fixed cost to the nearest whole dollar and
the variable cost to the nearest whole cent.
2.
What other factors other than occupancy-days are likely to affect the variation in electrical
costs from month to month?
EXERCISE 2-6 Traditional and Contribution Format Income Statements [LO2-6]
Cherokee Inc. is a merchandiser that provided the following information:
3:21 PM
O Type here to search
Hi
55
19
3/23/2020
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